Procurement Journey Strategic Positioning Action Plans Procurement Journey

Procurement Journey Strategic Positioning Action Plans Procurement Journey

Strategic Suppliers The recommended approach for Strategic suppliers is to actively manage the relationship Leverage High Business / Delivery of a Public Service Impact Routine § Consider long-term contracts or service-life agreements Strategic § Work closely with suppliers in product innovation and process Manage Supply § Joint product/process design and planning § Integrated systems § Supplier manages product/service § Consider on-site representation § Contingency planning § Manage risk Bottleneck Easy Low Action Plan Difficult Supply Market Opportunity Difficult e. g. typically most direct commodities/services fall into this category Strategic relationships must be partnerships with mutual benefits Procurement Journey

Bottleneck Suppliers The recommended approach for Bottleneck suppliers is to ensure supply of critical items High Leverage Business / Delivery of. High a Public Service Impact Routine Strategic Bottleneck Ensure Supply Low Action Plan § Long-term contracts § Ensure supplier is motivated to provide quality service § Look at developing new suppliers § Consider buffer stocks for additional security § Measure supplier performance to identify potential interruptions to supply § Move to generic specifications where appropriate § Manage the entire Supply Chain § Manage risk Difficult Easy Supply Market Opportunity e. g. complex specification products Bottleneck suppliers should ultimately be transitioned into another quadrant Procurement Journey

Leverage Suppliers The recommended approach for Leverage suppliers is to cut cost using innovation and competition, whilst managing risk in delivery of the commodity / service. High Business / Delivery of a Public Service Impact Low Leverage Strategic Reduce Total Cost Routine Bottleneck Easy Action Plan § Short-term contracts § Focus on price, whilst managing risk § Pursue a very active sourcing policy § Look for continued cost-reduction § Reduce stockholding § Consider the use of e. Auctions § Pursue value add services from supplier which reduce total cost § Manage transportation costs separately Difficult Supply Market Opportunity e. g. commodities/services… Leverage relationships are built around price whilst managing risk Procurement Journey

Routine Suppliers The recommended approach for Routine suppliers is to minimise management attention and investment High Business / Delivery of a Public Service Impact Low Leverage Routine Strategic Action Plan § Mid-term contracts § Utilise supplier own specifications § Offer supplier incentives to substitute § Reduce inventory – supplier managed § Relationship owned by budget holder/end-user § Simple performance measurement process with focus on reliability § Monitor internal time spent resolving problems § Manage risk Bottleneck Minimise Effort Difficult Easy Supply Market Opportunity e. g. Office Supplies, Desktops, Laptops etc. Routine relationships should take up minimal time and effort Procurement Journey